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Beckerman v. Heiman

June 16, 2006

PETER BECKERMAN AND RAINFOREST BOTANICALS, LLC., PLAINTIFFS,
v.
ROBERT HEIMAN AND EPICUREN DISCOVERY, INC., DEFENDANTS.



The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge

OPINION AND ORDER

Defendants have moved pursuant to 28 U.S.C. § 1404(a) to transfer this action to the Central District of California ("CDC"), Southern Division. For the following reasons, the motion is granted.

I. BACKGROUND

A. The Parties and Their Business Dealings

In July 1998, plaintiff Peter Beckerman formed Rainforest Botanicals, LLC ("Rainforest") with several close associates. See Declaration of Peter Beckerman in Opposition to Defendants' Motion to Transfer Venue, filed Nov. 30, 2005 (Docket #29) ("Beckerman Decl."), ¶ 1. Rainforest develops and distributes natural health products and ingredients, including a line of products called "Corigem Propolis," which is made from a substance generated by honey bees. Id. ¶ 1; Declaration of Robert Heiman in Support of Motion to Transfer Venue, filed Nov. 15, 2005 (Docket #20) ("Heiman Decl."), ¶ 2. Rainforest is incorporated in California. Beckerman Decl. ¶ 2. It has an office in Locust Valley, New York, id. ¶ 2, but, as described further below, that office appears to have no function other than to receive mail. Beckerman himself resides in Florida. Id. ¶ 3.

Defendant Epicuren Discovery, Inc., ("Epicuren") is a California corporation in the business of developing and marketing skincare and other spa products. See Declaration of Dennis Finger in Support of Motion to Transfer Venue, filed Nov. 15, 2005 (Docket #21) ("Finger Decl."), ¶ 3. Defendant Robert Heiman, also a California resident, is the founder of Epicuren and is actively involved in the development and marketing of its products. See Heiman Decl. ¶ 1.

Beckerman first met Heiman in Hawaii in September 2001 to discuss the sale of Rainforest's Corigem Propolis products. See Beckerman Decl. ¶ 13. Thereafter they had further discussions in Hawaii and also in person in California concerning a potential business relationship between Rainforest and Epicuren. Id. ¶ 13; Heiman Decl. ¶¶ 2, 6. The face-to-face meetings in California took place at Epicuren's place of business in Laguna Hills or at a nearby location. Heiman Decl. ¶ 6. Beckerman made some contacts with Epicuren via telephone from New York and Brazil. See Beckerman Decl. ¶¶ 13, 23.

Around the end of 2001, Beckerman sent samples of his product to Heiman in California, and Heiman used the samples as an ingredient to test and formulate new skincare and other health-related products. Heiman Decl. ¶ 3. In the spring of 2002, Heiman's work resulted in a topical gel that was beneficial as a skin treatment. Id. The development, production, and marketing of the Epicuren propolis products took place in the Central District of California at or near Epicuren's facility in Laguna Hills. See id. ¶¶ 8-9. Beckerman would often stop by Epicuren's offices during development of the products and would be given samples of the products at those times. Id. ¶ 8.

Robert Launer, an associate of Beckerman's who resides in New York, also met with and had numerous telephone conversations with Heiman concerning the potential business relationship. Beckerman Decl. ¶¶ 14-15. In addition, Gary Maley, Jeff Hughes, Daniel Garvin, Dorothy Aranson, Steve Farland, and Charles Beckerman met with Heiman and participated in the discussions with Heiman concerning the potential business relationship. Id. ¶ 16. Maley, Hughes, and Garvin reside in Hawaii, and Aranson and Charles Beckerman reside in New York. Id. ¶¶ 17-18. Farland resides in Colorado. Id. ¶ 19.

In May 2002, Rainforest and Epicuren entered into a written agreement ("Agreement") signed by Beckerman on behalf of Rainforest and by Heiman in both his individual and representative capacities. See Rainforest Botanicals LLC ("Agreement") (reproduced as Ex. D. to Memorandum in Support of Defendants' Motion Pursuant to 28 U.S.C. § 1404(a) to Transfer this Action to the Central District of California, filed Nov. 15, 2005 (Docket #19) ("Def. Mem.")). Beckerman and Rainforest were represented by Shepard A. Federgreen, Esq., in connection with the Agreement. Beckerman Decl. ¶ 21. Federgreen's office is located in New York. Id. ¶ 22. The Agreement was signed in California. Heiman Decl. ¶ 7.

The Agreement sets forth the terms of a business arrangement under which Rainforest agreed to sell Corigem Propolis to Epicuren for use in formulating Epicuren products. See Agreement. This suit alleges that Epicuren violated a provision of the Agreement that required Epicuren to "prominently feature the words Corigem PropolisTM" in the labeling and marketing of products. See Complaint ¶¶ 72-85; Agreement ¶ 4; Beckerman Decl. ¶ 25. In addition, Beckerman claims that he introduced a Dr. John Heggers and a Dr. Allan Lord to Heiman in reliance on Heiman's promise that he would represent plaintiffs' interests in negotiating with Drs. Heggers and Lord regarding their peer review of Corigem Propolis products. Complaint ¶¶ 96-105; Beckerman Decl. ¶¶ 39, 45. Instead, Heiman allegedly engaged in "self-dealing" by taking advantage of the introduction to develop business relationships with the doctors for his and Epicuren's exclusive benefit. Complaint ¶¶ 106-111; Beckerman Decl. ¶¶ 46-47.

Much of the promotion of Epicuren's products occurred in the Central District of California, including symposia to promote the new products. Heiman Decl. ¶¶ 10-12. There is no record of any promotion having taken place in New York. The bee propolis supplied by Rainforest was shipped from Brazil to California. Finger Decl. ¶ 5. Afterwards, a manufacturer located in Riverside, California, added the propolis into Epicuren's formulations and bottled the final product. Id. The labels were designed in California, and were placed on the products there. Id. The products were sold worldwide, including some sales to New York consumers at spas, hotels and retail outlets. Beckerman Decl. ¶ 27. Less than 2% of the product sold worldwide was sold in New York, and more than 70% was sold in California. Finger Decl. ¶ 6.

The billings from and payments to Rainforest under the Agreement were transmitted to and handled through Rainforest's office in New York. Beckerman Decl. ¶ 23.

B. The Instant Action

On June 1, 2005, plaintiffs filed the complaint in this action. See Complaint. The complaint asserts various claims under the Lanham Act and New York state law, including "false designation of origin (reverse palming off), false advertising, trademark infringement, trademark dilution, unfair competition, misappropriation of trade secrets, breach of contract, breach of covenant of good faith and fair dealing, conversion, tortious interference with prospective business advantage or relations, breach of fiduciary duty, fraudulent misrepresentation, product disparagement, and other related wrongful and illegal actions." Id. ¶ 1. On October 24, 2005, plaintiffs filed a motion for a preliminary injunction, see Docket #9, which was denied on December 16, 2005.

On November 15, 2005, defendants filed the instant motion and supporting papers to transfer venue. See Notice of Motion, filed Nov. 15, 2005 (Docket #18); Def. Mem.; Heiman Decl.; Finger Decl. Plaintiffs opposed the motion and filed opposition papers. See Beckerman Decl.; Memorandum of Law in Opposition to Defendants' Motion to Transfer Venue, filed Nov. 30, 2005 (Docket #28) ("Pl. Opp. Mem."). Defendants filed a reply. See Reply Memorandum in Support of Epicuren's Motion to Transfer, filed Dec. 12, 2005 (Docket #34) ("Def. Reply Mem."). Thereafter, defendants submitted a letter making additional arguments. See Letter from Charles R. Hoffmann to Judge Gorenstein, filed Mar. 28, 2006 (Docket #39) ("Def. Supp. Letter"). Plaintiffs responded to this letter. See Letter from Bryan Ha to Judge Gorenstein, dated April 3, 2005 ("Pl. Supp. Letter").

II. DISCUSSION

A. Law Governing Motions to ...


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